TransAlta and TransAlta Renewables Respond to Notice of Termination for the South Hedland Power Purchase Agreement Received from Fortescue Metals Group
CALGARY, Alberta (November 13, 2017) – TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA, NYSE: TAC) and TransAlta Renewables Inc. (“TransAlta Renewables”) (TSX: RNW) announced today that TEC Hedland Pty Ltd, a subsidiary of TransAlta, received formal notice of termination of the South Hedland Power Purchase Agreement (“PPA”) from a subsidiary of Fortescue Metals Group Limited (“FMG”). The PPA allows FMG to terminate the agreement if the power station has not reached commercial operation within a specified time period. FMG continues to be of the view that the South Hedland Power Station has yet to achieve commercial operation.
TransAlta and TransAlta Renewables remain confident that all conditions required to establish commercial operations, including all performance conditions, have been achieved under the terms of the PPA. These conditions include receiving a commercial operation certificate, successfully completing and passing certain test requirements, and obtaining all permits and approvals required from the North West Interconnected System (“NWIS”) and government agencies.
Confirmation of commercial operation has been provided by independent engineering firms, as well as by Horizon Power, the state-owned utility. TransAlta and TransAlta Renewables will take all steps necessary to protect their interests in the facility and ensure all cash flows promised under the PPA are realized.
The South Hedland Power Station has been fully operational and able to meet FMG’s requirements under the terms of the PPA since July 2017.
The South Hedland Power Station, located in the Pilbara Region of Western Australia, is a 150 MW combined-cycle natural gas power station that is one of the most efficient power plants in Western Australia, providing low cost electricity to its customers and generating low greenhouse gas emissions.
About TransAlta Corporation:
TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate wind, hydro, solar, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives. TransAlta has been recognized on CDP’s Canadian Climate Disclosure Leadership Index (CDLI), which includes Canada’s top 20 leading companies reporting on climate change, and has been selected by Corporate Knights as one of Canada’s Top 50 Best Corporate Citizens and is recognized globally for its leadership on sustainability and corporate responsibility standards by FTSE4Good.
About TransAlta Renewables Inc.:
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 18 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities (including South Hedland) and one natural gas pipeline, representing an ownership interest of 2,316 MW of net generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the State of Wyoming and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.
Cautionary Statement Regarding Forward Looking Information:
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company and TransAlta Renewables that are based on the Company’s and TransAlta Renewable’s current expectations, estimates, projections and assumptions in light of their experience and their perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements pertaining to, without limitation, the following: the satisfaction of all conditions to achieving commercial operations under the terms of the PPA; the ability of the South Hedland Power Station to meet all of the requirements of FMG under the terms of the PPA; TransAlta and TransAlta Renewables taking all steps necessary to protect their interests in the South Hedland Power Station and to ensure all cash flows promised under the PPA are realized; and the ability of the South Hedland Power Station to provide low cost electricity and generate low greenhouse gas emissions. These forward-looking statements are not historical facts but reflect the Company’s and TransAlta Renewables’ current expectations concerning future plans, actions and results. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to: the outcome of the dispute with FMG; and operational breakdowns, failures, or other disruptions. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s and TransAlta Renewables’ expectations only as of the date of this news release. The Company and TransAlta Renewables disclaim any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
For more information:
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|Sally Taylor||Stacey Hatcher|
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|Phone: 1-800-387-3598 in Canada and U.S.||Toll-free media number: 1-855-255-9184|
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